MIFEE Ploughs on, Despite Hitting Rocky Ground

MIFEE’s progress has hit major obstacles during the course of 2011, to the extent that it is uncertain whether it will go ahead at all. Disagreements between different levels of government and a lack of clarity about who would take responsibility to develop necessary infrastructure have led to a stalemate. Meanwhile the widespread opposition to MIFEE, most notably from the local people, combined with an increasingly volatile situation in West Papua, have also caused investors to hold back. Progress has undoubtedly slowed down, but the threat of massive agricultural development in Merauke has far from gone away. Here is an analysis of recent developments:

Provincial Government not in agreement: The conceptual development of MIFEE was carried out almost exclusively between the local Merauke government and the national government in Jakarta, bypassing the provincial Papuan government almost entirely.(60) So when the Provincial government drew up its own land use plan, it refused to grant the full 1.28 million hectares of land for MIFEE that the Merauke regency had allocated in its land-use plan, and only allocated 552,000 hectares for the mega-project. The provincial government did not explain whether their motivation for this was, a concern for local people and environment, a belief in the importance of Papuan autonomy, or simply irritation that they had been left out of the windfall. The dispute caused some delays, but by 8th January 2011, the then-governor of Papua province, Barnabas Suebu, made a speech confirming that the provincial government fully supported the MIFEE program.(61) Since the plan was always to implement MIFEE in phases over several years, MIFEE’s proponents can still regard the 552,000 hectares as a ‘safe’ area where development can definitely go ahead, and larger areas may be added in the future, if and when the political conditions become conducive.

Infrastructure: No comprehensive plan has been produced about how to pay for the vast infrastructure development needed to turn one of Indonesia’s most isolated areas into an agricultural hub. Companies that have expressed an interest in MIFEE often express that they are hesitant to commit before being sure whether sufficient infrastructure developments would be forthcoming in order to make their investment worthwhile.

This may be a particular concern to those companies who hope to develop food crops. This may be because crops such as rice and corn need a far higher level of infrastructure than an oil palm plantation would, and they must be able to produce grain at the same price as peasant farmers who are located much nearer the market. For example Heka Widya A Hertanto, Director of PT Sumber Alam Sutera, part of the Artha Graha group which specialises in hybrid rice, has said that to develop 10,000 hectares for rice cultivation, an investment of 1 trillion Rupiah (around 85 million Euros) is needed. On top of that there are the costs of experimenting with crop varieties, mobilising a labour force, equipment and managing the high risk of crop failure. He said that if the government did not prioritise investment then investors would not take part in developing Merauke as a food estate. “In a food estate area the government also must build an integrated district where aside from rice fields there are fertilizer factories, rice mills, warehouses, ports, electricity generation, housing developments and so on”, he said.(62)

The central government allocated 300 billion Rupiah to Merauke in 2011, 77 million of which was to be used for agricultural infrastructure such as irrigation, with the remainder allocated to building roads and bridges.(63) However it is possible that not all of that money will reach its intended destination. Indonesia has a long history of corruption when it comes to local development plans, and this is even more the case in West Papua. It could well be the case that state funds to build roads and irrigation, for example, disappear before the projects are realised.

Some development has gone ahead already however: in December 2011 a 41 kilometre stretch of earth road connecting Okaba to Wanam in Ilwayab district, which in the media was reported as being intended for MIFEE.(64)

On the other hand, businesses are reluctant to directly fork out the capital needed for building infrastructure themselves, if there is the possibility that someone else will pay. However, there are reports that five or six investors, including Wilmar, Medco, Sinar Mas and corporations owned by Anthoni Salim and Ibrahim Risjad have apparently also agreed to build infrastructure in return for promises of land for their sugar cane plantations and tax holidays. The economic ministry included this procedure in a recent law, government regulation No. 94/ 2010.(65) The possibility that foreign countries might contribute through development aid had been raised when the Japan International Cooperation Agency was in talks with the government in October 2009 about spending $250 million on port facilities.(66) But it is likely that that this money was also linked to an investment plan that Mitsubishi had at the time, as no further updates on JICA’s investment have been published.

Political Situation in Papua: Papua’s continuing unrest would not make any investor feel secure. 2011 was a turbulent year in Papua. The movement for West Papuan independence has been asserting itself more and more frequently. At the start of August, demonstrations took place across West Papua supporting the UK launch of International Lawyers for West Papua and demanding a referendum. By October, the third Papuan People’s Congress was opened in Jayapura, only to be violently broken up by police who killed several people and arrested hundreds after the Congress resolved to declare Independence. On 1st December, Papuans marked the 50th anniversary of the day that a West Papuan national flag had been flown for the first time, and flag-raisings and other actions were held in most cities through the territory.

Violence and conflict have also increased markedly in 2011. Kontras Papua has recorded 65 cases of violence from the police, the military, or from unidentified perpetrators during the year.(67) Particular brutality has occurred in the highland regions, Puncak Jaya and Paniai, where military operations have killed dozens of people, burned several villages to the ground and caused villagers to repeatedly flee their homes.(68)

Meanwhile the workers at West Papua’s longest-standing and largest investment have carried out a strike which has developed a momentum that seems to encapsulate much more than the ostensible demand of a pay increase. Workers at the Freeport mine were on strike for four months, and refused to return to work even after a union-negotiated settlement, because workers maintained their solidarity with employees of a subcontractor who were threatened with dismissal after joining the strike.(69) Mysterious shootings have also occurred along the road to Freeport which have claimed the lives of several police officers and Freeport workers.

Since MIFEE was first proposed the touchpaper of rebellion has been relit in West Papua and no-one knows which direction it could go in next. If Papua’s future remains unclear, the climate for investment is particularly so.

Opposition to MIFEE: Papuan opposition to MIFEE has come from many corners, and has been quite well organised. Statements of opposition have not only come from the people of Merauke who will be directly affected, but from across West Papua . Papuan movements throughout the whole Land of Papua see MIFEE as another assault on their existence from outside Indonesian and foreign Capital. For example, Forkorus Yaboisembut is the leader of the Papuan Customary Council (Dewan Adat Papua), who has been in prison since he was declared the president of an independent West Papua in October 2011. He has explained that he opposes MIFEE because it is proof of the destruction of indigenous Papuan peoples along with their land and the natural resources which bring unity to their society and culture, in the interests of outsiders and others. This will have the effect of making indigenous Papuans marginalised and under threat of extinction as distinct peoples as their living space becomes constricted.(70)

Papuan activists have set up groups to campaign around MIFEE, most notably SORPATOM, which was formed first in Jayapura and later in Merauke. They have organised demonstrations in both cities.(71) Local NGOs that are active in Papua have also shown concern about MIFEE, researching the situation on the ground and carrying out advocacy activities with communities. National Indonesian networks have also made statements against MIFEE, such as the AMAN indigenous people’s network(72), SPI farmers’ union(73), Sawit Watch(74), which monitors oil palm developments and KIARA, the association of fisher-folk.

Then of course there has been the resistance of the villagers themselves, as documented above. In particular there has been the many-month-long stand-off between the people of Sanggase and Medco, and villagers around the area have declared their resolve to resist. The widespread opposition to investors has led to Merauke’s new Bupati, Romanus Mbaraka (who was elected in 2011 and so is less implicated in the project than his predecessor), making declarations that claim to uphold the people’s rights against aggressive companies. In December 2011, he even repealed Medco’s license to cut further into the forest, and asked villagers to report any investor who came secretly to their village trying to trick them into a deal.(75) The general chair of the Papua Provincial Chamber of Trade and Industry (Kadin), Jhon Kadey, is quoted in local paper the Cenderawasih post as saying “All the investors in Papua are very scared of what’s known as hak ulayat. Because of that it’s very difficult for investors to enter Papua”.(76) Local opposition is frequently cited as a main reason for MIFEE’s stagnation.

In the case of the Hardaya plantations of the Central Cipta Murdaya group, the Bupati has said that the local government will act as a go-between in mapping ulayat rights to avoid a repetition of what happened with Medco in Sanggase kampung.(77) However it remains to be seen whether this is motivated only by a wish to protect communities or also to smooth the way for investors to operate by avoiding potential future conflicts over ulayat.

Challenges at the United Nations: In July and August 2011, a group of NGOs, including local groups based in Merauke as well as Indonesian and European-based groups, wrote to three United Nations bodies requesting they take action against MIFEE. The UN bodies are the Committee on the Elimination of Racial Discrimination(CERD), the Special Rapporteur on Food Security and the Committee on Economic, Social and Cultural rights (CESCR). The letters are essentially asking for the UN groups to use their influence to push for a moratorium in the implementation of MIFEE until such time as laws and land titling are adjusted to ensure the security of local indigenous people in Merauke.(78) A different coalition of NGOs has also written to the UN, requesting that concerns about MIFEE be included in the United Nations Universal Periodic Review of Human Rights, released once every four years.(79)

The CERD has responded to the letter, writing to Indonesia’s ambassador to the United Nations outlining their concerns, requesting information of what measures have been taken to obtain the free prior informed consent of the local Malind people and whether any research has been done on how they are to be affected by the mega-project. The CERD also requests a meeting to discuss issues arising at its next session in February-March 2012.

Moratorium on Forest Clearance: In 2010 a deal was announced between the governments of Norway and Indonesia where Norway would pay Indonesia $1 billion in exchange for Indonesia implementing a moratorium on logging primary forest over the course of two years. There was speculation that the deal would result in MIFEE not going ahead, or on a greatly reduced scale.(80) However, after many months of negotiation, much of Merauke Regency was excluded from the final map of the area covered by the moratorium. Several exceptions were made in the Presidential Instruction defining how the moratorium was to be implemented (Inpres 10/2011), one of which was for the “vital national developments: geothermal, oil and natural gas, electricity generation, land for rice and sugar-cane”(81) which can be taken to mean that MIFEE would be exempt from the moratorium.(82)

The moratorium map was revised in November 2011, a few months after it came into effect, and a further 350,000 hectares of the MIFEE area that had previously been categorised as peatland were excised from the moratorium map. This action reaffirming that MIFEE would be exempt from the moratorium was highlighted by Greenomics, who also pointed out that the some of this land was intended for corn or livestock farming, not rice or sugar, and that a further 200,000 hectares of primary forest were still included in MIFEE clusters.(83)

The ambiguity about what MIFEE really is, and the fact that it includes timber and pulpwood projects and oil palm as well as rice and sugar-cane, has not been addressed in the moratorium, which has its own fair share of ambiguities. Some reports suggest it is having an effect: in August 2011 a comment from MP Tumanggor, the commissioner for Wilmar, the Singaporean company that has been eyeing 200000 hectares for sugar-cane, reveals his company’s exasperation with the process: “In Merauke it’s also not possible. The news is that the food estate has been postponed. The land that was available before will even be turned into protected forest”.(84)

A further admission that all was not going to plan was revealed by Agriculture Minister Suswono to the Jakarta Globe newspaper in August 2011. He claimed that he was considering relocating the food estate plan to East Kalimantan, because progress had been too slow in Merauke. “It has been two years since we floated the plan, but there has been no progress at all.”, he said. “The construction of the Merauke food estate was obstructed by lack of regulation to clear necessary land.”(85)

So is MIFEE on the way out? Despite all the stories that the mega-project is on the rocks, there are still plenty of indications that large-scale agriculture is still being planned in Merauke, and that investors are just waiting for the right moment to make their move, and indeed some are already planting. This is evident from reports from villages, which indicate that potential investors are continuing to make approaches to villages. Further indications come from the international markets – during 2011 three MIFEE investors were bought by multinational companies: Korean corporations Daewoo and Moorim bought controlling shares in PT Bio Inti Agrindo and PT Plasma Nutfah Marind Papua respectively, while Wilmar formally bought PT Anugrah Rejeki Nusantara.

Despite Suswono’s comments, the Indonesian Government remains committed to establishing Merauke as a centre for food production. In May 2011 a “Master Plan for the Acceleration and Expansion of Indonesian Economic Growth” was launched, which outlines Indonesia’s strategy for economic development over the next 15 years. Six ‘economic corridors’ are outlined – the plans in Papua are some new roads, growth to be generated through copper mining, oil and gas and, in Merauke, food production from MIFEE.

Companies’ plans for vast new plantations are highly speculative in nature, sometimes they go ahead and sometimes they don’t. Many previous plans for developing Merauke’s forests have fallen through, and there are many factors which could cause the present batch to fail as well. However, with land in the rest of Indonesia already under high pressure, Papuan forests will remain attractive targets for exploitation, and there will be a constant push from companies who hope that they could be the pioneers that will tame this frontier. The potential profits to be made are so huge that companies can afford to wait a year or two. The people of Merauke are likely to have to face a prolonged battle if they want to continue to live according to their traditional pathways or determine a future that they feel is appropriate.